The Andersons, Inc. Reports Second Quarter Results

MAUMEE, Ohio, Aug. 6, 2014 /CNW/ -- The Andersons, Inc. (Nasdaq: ANDE) today announced financial results for the second quarter ended June 30, 2014.

The Andersons, Inc. logo.

Highlights

  • Record operating income of $33.9 million for the Ethanol Group
  • Second quarter diluted EPS up almost 50 percent from same period last year
  • Plant Nutrient Group had operating income of $25.0 million

"We're pleased with our first half performance for 2014, which is a record," said CEO Mike Anderson. "Both our Ethanol and Plant Nutrient groups had strong results this quarter.  In fact, our Ethanol Group had the best quarter in its history.  In addition, our Grain Group's operating income benefitted from improved space income in our grain operations, and the addition of income from the Thompsons Limited joint venture."

All financial and operating highlights below are quarterly data compared to the same period of the prior year, unless otherwise noted.

Financial Highlights

Second quarter net income attributable to the company was $44.3 million, or $1.56 per diluted share, on revenues of $1.3 billion.  In the same three month period of 2013, the company reported results of $29.5 million, or $1.05 per diluted share, on revenues of $1.6 billion.

  • The Ethanol Group realized excellent margins at all plants. These margins were supported primarily by ongoing increases in export demand, lower corn prices and excellent operating metrics. The Ethanol Group had record E-85 sales and an increase in distillers dried grains and corn oil sales.
  • The Plant Nutrient Group exceeded its prior year six-month earnings performance. 
  • The Rail Group recognized $2.5 million in pre-tax gains on sales of railcars and related leases and non-recourse transactions during the quarter, which is approximately $2.4 million less than the prior year.

Operating Highlights

The following highlights have impacted reported results, or may impact future results:

  • Crop conditions in the majority of our territories are ideal.  Continued good weather provides the potential for record corn and soybean yields.
  • The Ethanol Group had record ethanol production. 
  • At this time, we have approximately 75 percent of the third quarter and 33 percent of the fourth quarter ethanol futures risk hedged.  The majority of those hedges were placed in the first quarter, consistent with our strategy to lock-in reasonable forward returns when available in the market.  Other hedges were added in the second quarter, consistent with our risk management strategy.   We currently are managing margins in the spot market for the rest of our production.   
  • Volume for the Plant Nutrient Group was up approximately six percent during the first half of the year, regaining all of the first quarter volume reduction. Further, gross profit per ton increased slightly.
  • At the end of June, the Rail Group's utilization rate was 89.1 percent, up from 86.1 percent the prior year.  Further, the utilization rate is expected to increase as the year progresses.    

Conference Call
The company will host a webcast on Thursday, August 7, 2014 at 11:00 A.M. ET, to discuss its performance.  This can be accessed under the heading "Investor" on its website at www.andersonsinc.com.

Forward Looking Statements
This release contains forward-looking statements.  These statements involve risks and uncertainties that could cause actual results to differ materially.  Without limitation, these risks include economic, weather and regulatory conditions, competition, and the risk factors set forth from time to time in the Company's filings with the Securities and Exchange Commission.  Although the Company believes that the assumptions upon which the financial information and its forward-looking statements are based are reasonable, it can give no assurance that these assumptions will prove to be correct.

Company Description
The Andersons, Inc. is a diversified company rooted in agriculture.  Founded in Maumee, Ohio, in 1947, the company conducts business across North America in the grain, ethanol, and plant nutrient sectors, railcar leasing, turf and cob products, and consumer retailing. The Andersons, Inc. is located on the Internet at www.andersonsinc.com

 

The Andersons, Inc.








Consolidated Statements of Income







(Unaudited)

















Three months ended June 30,


Six months ended June 30,

(in thousands, except per share data)

2014


2013


2014


2013









Sales and merchandising revenues

$              1,312,082


$                 1,566,964


$              2,315,376


$                 2,838,934

Cost of sales and merchandising revenues

1,190,587


1,463,735


2,117,106


2,656,432

Gross profit

121,495


103,229


198,270


182,502

Operating, administrative and general expenses

76,275


61,464


147,260


123,472

Interest expense

6,146


4,855


12,148


11,259

Other income:








Equity in earnings of affiliates

32,213


10,010


52,714


17,814

Other income, net

3,797


1,292


23,409


4,018

Income before income taxes

75,084


48,212


114,985


69,603

Income tax provision

25,714


17,480


39,586


26,559

Net income

49,370


30,732


75,399


43,044

Net income attributable to the noncontrolling interests

5,069


1,193


8,390


927

Net income attributable to The Andersons, Inc.

$                    44,301


$                      29,539


$                    67,009


$                      42,117









Per common share:








Basic earnings attributable to The Andersons, Inc. common shareholders

$                        1.56


$                          1.05


$                        2.36


$                          1.50

Diluted earnings attributable to The Andersons, Inc. common shareholders

$                        1.56


$                          1.05


$                        2.36


$                          1.49

Dividends paid

$                    0.1100


$                      0.1067


$                    0.2200


$                      0.2133









 

The Andersons, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)


















(In thousands)

June 30, 2014


December 31, 2013


June 30, 2013


Assets







Current assets:







Cash and cash equivalents

$               47,190


$                309,085


$                75,920


Restricted cash

895


408


872


Accounts receivable, net

189,646


173,930


216,432


Inventories

432,996


614,923


444,523


Commodity derivative assets – current

162,427


71,319


121,789


Deferred income taxes

7,443


4,931


2,797


Other current assets

24,596


47,188


44,936


Total current assets

865,193


1,221,784


907,269


Other assets:







Commodity derivative assets – noncurrent

312


246


87


Other assets, net

116,985


118,010


103,781


Pension asset

13,023


14,328


-


Equity method investments

264,381


291,109


195,241



394,701


423,693


299,109


Railcar assets leased to others, net

242,147


240,621


242,887


Property, plant and equipment, net

390,587


387,458


371,716


Total assets

$         1,892,628


$             2,273,556


$           1,820,981









Liabilities and equity







Current liabilities:







Borrowings under short-term line of credit

$               27,000


$                          -


$                50,000


Accounts payable for grain

164,230


592,183


178,017


Other accounts payable

143,535


154,599


183,971


Customer prepayments and deferred revenue

21,670


59,304


25,621


Commodity derivative liabilities – current

86,134


63,954


58,183


Accrued expenses and other current liabilities

81,260


70,295


57,456


Current maturities of long-term debt

89,387


51,998


45,096


Total current liabilities

613,216


992,333


598,344









Other long-term liabilities

15,032


15,386


15,634


Commodity derivative liabilities – noncurrent

7,444


6,644


5,863


Employee benefit plan obligations

39,178


39,477


50,754


Long-term debt, less current maturities

300,220


375,213


409,020


Deferred income taxes

126,258


120,082


87,486


Total liabilities

1,101,348


1,549,135


1,167,101


Total equity

791,280


724,421


653,880


Total liabilities and equity

$         1,892,628


$             2,273,556


$           1,820,981









 

Segment Data


















(In thousands)

Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Three months ended June 30, 2014









Revenues from external customers

$      656,004

$    226,388

$  311,895

$    33,409

$        42,913

$    41,473

$           —

$    1,312,082










Gross profit

27,909

18,638

40,733

13,863

7,805

12,547

121,495










Equity in earnings of affiliates

8,467

23,746

32,213










Other income, net

975

356

391

787

467

190

631

3,797










Income (loss) before income taxes

10,352

38,976

25,004

6,684

1,998

1,637

(9,567)

75,084










Income (loss) attributable to the noncontrolling interests

(3)

5,072

5,069










Operating income (loss) (a)

$         10,355

$      33,904

$    25,004

$      6,684

$          1,998

$      1,637

$    (9,567)

$         70,015










Three months ended June 30, 2013









Revenues from external customers

$         891,350

$      222,240

$    330,339

$      38,601

$          43,144

$      41,290

$            —

$      1,566,964










Gross profit

22,092

9,649

37,201

14,557

7,321

12,409

103,229










Equity in earnings of affiliates

5,027

4,983

10,010










Other income (expense), net

(349)

199

164

702

175

100

301

1,292










Income (loss) before income taxes

2,053

11,794

23,240

9,680

2,195

1,539

(2,289)

48,212










Income attributable to the noncontrolling interest

1,193

1,193










Operating income (loss) (a)

$             2,053

$        10,601

$      23,240

$        9,680

$            2,195

$        1,539

$     (2,289)

$           47,019











Grain

Ethanol

Plant Nutrient

Rail

Turf & Specialty

Retail

Other

Total

Six months ended June 30, 2014









Revenues from external customers

$   1,239,163

$    415,208

$  419,525

$    85,711

$        86,638

$    69,131

$           —

$    2,315,376










Gross profit

44,917

26,003

54,808

35,728

16,280

20,534

198,270










Equity in earnings of affiliates

10,351

42,363

52,714










Other income, net

19,321

130

576

1,497

774

302

809

23,409










Income (loss) before income taxes

21,655

62,124

23,593

21,729

3,373

(698)

(16,791)

114,985










Income (loss) attributable to the noncontrolling interests

(6)

8,396

8,390










Operating income (loss) (a)

$         21,661

$      53,728

$    23,593

$    21,729

$          3,373

$        (698)

$ (16,791)

$       106,595










Six months ended June 30, 2013









Revenues from external customers

$      1,727,845

$      421,549

$    442,241

$      84,965

$          90,331

$      72,003

$            —

$      2,838,934










Gross profit

46,942

14,454

51,150

33,536

16,339

20,081

182,502










Equity in earnings of affiliates

12,937

4,877

17,814










Other income, net

222

430

139

1,648

450

214

915

4,018










Income (loss) before income taxes

10,352

14,007

22,678

24,254

6,196

(1,630)

(6,254)

69,603










Income attributable to the noncontrolling interest

927

927










Operating income (loss) (a)

$           10,352

$        13,080

$      22,678

$      24,254

$            6,196

$      (1,630)

$     (6,254)

$           68,676










(a) Operating income (loss) for each Group is defined as net sales and merchandising revenues plus identifiable other income less all identifiable operating expenses, including interest expense for carrying working capital and long-term assets and is reported net of the noncontrolling interest share of income (loss).










 

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SOURCE The Andersons, Inc.

For further information: Investor Relations, Nick Conrad, Phone: 419-891-6415, E-mail: nick_conrad@andersonsinc.com, http://www.andersonsinc.com